AUSTRALIAN mortgage customers are signing up to larger home loans than ever before resulting in a rising number of borrowers locking in their loans to ensure they can survive future rate rises.

Figures from the nation’s largest mortgage broker, Australian Finance Group show the nation’s average mortgage size has fattened by 10 per cent from $402,000 in July last year to $443,000 in July this year.

The number of customers fixing their loans has risen dramatically in the past five years — increasing from five per cent in July 2009 to 24 per cent in July this year.

The nation’s biggest banks started a fixed rate war last month dropping five-year fixed rates to below five per cent for the first time in decades.

On the rise ... the average mortgage size has jumped by 10 per cent in the past year. Picture: News Corp Australia.Source:News Limited

AFG’s chief executive officer Mark Hewitt said post-global financial crisis Australians moved away from locking in their interest rates as the cash rate dropped, but this has taken a turn and now large numbers are choosing to lock in their home loan rate.

“Some people are getting in now and fixing and taking advantage of the falls because it might not get any better,’’ he said.

“There’s a few concerns in the economy now including unemployment levels so people are becoming a bit more cautious and in that environment people will tend to fix because they want a bit more certainty.”

The Reserve Bank of Australia has kept the cash rate on hold at 2.5 per cent since August last year and experts say it may not move again until 2015.

Resi Mortgage Corporation’s spokeswoman Lisa Montgomery said fixed rate loans remained appealing to borrowers looking for certainty but urged them to think twice before locking in for extended periods.

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